“Growth was driven by new lease commencements, contributions from Dover Marketplace (acquired in Aug 2025), rental escalations on existing leases, and lower finance costs,” states Chan.
While UHREIT’s occupancy for grocery & necessity properties remained high at 97.7% (3QFY2025: 97%), its self-storage properties saw occupancy decline to 88.7% (3QFY2025: 94.9%) due to seasonality and tenant turnover.
“The portfolio’s stability is underpinned by strong grocery & necessity occupancy rate, a long weighted average lease expiry (WALE) of 7.7 years, a 90% tenant retention rate, and minimal leasing risk in FY2026, with only 2.9% of grocery & necessity leases expiring,” explains Chan.
Chan sees the above as key contributing factors towards strong income visibility and supports long-term growth for UHREIT.
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As such, he is keeping a “buy” call on UHREIT with an unchanged DDM-based target price of 69 US cents, while keeping his estimates unchanged.
“UHREIT currently trades at an attractive FY2026 dividend yield of 8.4% and P/NAV of 0.76 times,” concludes Chan.
At the same time, Jonathan Koh of UOB KayHian sees UHREIT “pulling multiple levers” such as asset recycling, accretive acquisitions and asset enhancement initiatives (AEI) to drive sustainable growth.
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In his Feb 23 report, he sees UHREIT could benefit from full-year contributions from the acquisitions of Dover Marketplace and Wallingford Fair in FY2026.
“It could consider recycling assets by divesting self-storage properties, which has a yield of around 5% and reinvesting in strip centres that could yield between 6-7%,” adds Koh.
On the AEI front, UHREIT is developing a new 5,000 sq ft store on excess land and is pre-leased to Florida Blue, a health insurance company, under a 10-year lease agreement.
“It is located next to the existing Academy Sports store, which opened in Nov 2023 and has already contributed positively,” Koh mentions.
The analyst adds that the new store is expected to generate rental income upon its completion in 4QFY2026 and UHREIT’s management estimated capex to be at US$2 million and ROI of 10%.
Finally, in Koh’s perspective, UHREIT is trading at an attractive yield spread despite a resilient business model.
“UHREIT trades at FY2026 distribution yield of 8.8%, which represents an attractive yield spread of 4.7% above the 10-year US government bond yield of 4.1%. It trades at a P/NAV of 0.77 times,” states Koh.
As such, Koh is maintaining his “buy” call on UHREIT with a target of 72 US cents, which is based on DDM with cost of equity at 8.5% and terminal growth of 1.5%.
As at 1.20pm, units in UHREIT are trading flat at 56 US cents.
